Skype Gets 40% Markup as Microsoft Surprised Owners: Real M&A

Microsoft Corp. is paying a dot-com era price for Skype Technologies SA, almost 40 percent more than the world’s most popular Internet calling service itself says the business is worth.

Microsoft, the world’s largest software company, agreed to pay $8.5 billion for Luxembourg-based Skype, which lost money in four of the past five years even as it quadrupled sales. The takeover, the largest for an Internet company since May 2000, is 32 times Skype’s adjusted earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg. That’s 39 percent more than the multiple Skype used to value its own equity in an April regulatory filing.